What Organizations Will Louisiana Sports Betting Tax Revenue Go To?
Stephen Lew/Icon Sportswire via Getty Images. Pictured: Tiger Stadium in Baton Rouge, LA, home of the LSU Tigers football team.
With one of the lower tax rates on sports betting in America, a competitive marketplace is developing in Louisiana.
Where will this newfound revenue go?
In the past few months, brick-and-mortar sportsbooks have launched across their state. As anticipation for the rollout of online sports betting in Louisiana builds, so does the revenue that retail books are bringing in.
The current tax rates that sportsbook operators pay on their revenues is set at 10% for bets placed at retail locations, and 15% for bets placed online or through a mobile device, thanks to House Bill 697.
Not quite as low as Nevada’s 6.5% tax rate, but nowhere near New York’s monster tax rate of 51%.
Sports betting was legalized in the summer of 2021, and those visiting land-based casinos started placing wagers on Oct. 31. Louisiana State Police’s Gaming Enforcement Division reported a total of $5.7 million in revenue from sports bets placed at these locations in November, resulting in a tax revenue of $568,000 for the state.
Online betting will increase handle and revenue, but where will the money go?
Act No. 435 details exactly how tax revenue from sports betting will benefit the state:
| Amount | Fund |
|---|---|
| 2% or $500,000 | Behavioral Health & Wellness Fund |
| 25% not to exceed $20M | Louisiana Early Childhood Education Fund |
| 10% | Sports Wagering Local Allocation Fund |
| 2.5% | Sports Wagering Purse Supplemental Fund |
| 2% not to exceed $500,000 | Disability Affairs |
| Remaining 58.5% | General State Affairs |
Behavioral Health & Wellness Fund: Monies in the fund are utilized to support and invest in intensive and comprehensive treatment facilities for individuals with compulsive and problem gambling addictions.
Louisiana Early Childhood Education Fund: This fund serves as the funding for early childhood education and secondary education. Monies in this fund are distributed amongst schools and care facilities within the state as the State Board of Education sees fit.
Sports Wagering Local/Purse Allocation Fun: These monies are allocated to fund purses in horse races. Two-thirds of the funds go to the Louisiana Thoroughbred Breeders Association, and one-third goes to the Louisiana Quarter Horse Breeders Association.
Disability Affairs: The Office of Disability Affairs is designed to adequately educate, address, and resolve issues relative to the disability community.
General State Affairs: The primary fund for financing a state’s operations.
We estimated last year that Louisiana has lost out on about $37 million per year in tax revenue for the state by not legalizing sports betting sooner.
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